Move over DMP, DSP and SSP: CDP is ad tech’s hot new acronym

If demand-side and supply-side platforms have found that venture capital funding is running dry, the reverse is true for customer data platforms, which tech executives and investors see as customer-relationship management platforms for business-to-consumer marketers. CDPs have gained momentum lately because they promise to offer a single view of a consumer across multiple devices, mainly based on a brand’s first-party data.

Much venture capital money is going into CDPs. For instance, Bluecore raised $35 million in series C funding last October, and mParticle raised the same amount last September, while Segment raised $64 million in series C funding last July.

Although the CDP market is being defined, John Matthews, managing director for Oaklins DeSilva+Phillips who advises on company exits, thinks CDPs will likely become acquisition targets for ad tech companies this year to underpin their targeting capabilities with richer and more unified targeting data, given the convergence of ad tech and marketing tech, with crossover merger and acquisition activities already taking place. “Overall, this moves ad tech companies toward being more CRM-focused for marketers,” said Matthews.

Eric Franchi, an early investor in mParticle, also said CDPs are hot right now and have “tremendous upside,” so they could grow into their own market. He doesn’t categorize CDPs as ad tech companies.

But as DMPs and CRM software evolve, they can do many things that CDPs claim to do. For instance, major DMPs that traditionally rely on third-party data have started processing first-party and second-party data, according to Matt Skinner, product marketing manager for DMP Adobe Audience Manager. “CDPs are an interesting emerging area. They talk about including PII [personally identifiable information] into their first-party data, which DMPs don’t do. But there’s lots of overlap in what CDPs, CRMs and DMPs can facilitate,” said Skinner. “I think CDP will be a big buzzword in 2018.”

Meanwhile, Matthews, who was a CRM industry analyst and consultant for 15 years, believes CDPs are just hybrids of DMPs and CRM platforms that incorporate online advertising data to enable some form of real-time analytics and targeting, across multiple offline and online channels. “[The rise of CDPs] also ties into the increasingly talked-about idea of people-based marketing, as in people as customers or prospective customers,” said Matthews.